Tuesday, October 22, 2013

More DIY Real Estate Brokerage

The most popular posts in this blog deal in some way with real estate brokerage commissions (HOA issues are a close second). Now, news comes of a startup out of Kansas whose technology allows lay people to perform work traditionally done by real estate brokers.

With Keyzio, home buyers and sellers can connect without, well, actually connecting. Keyzio wants to create a home marketplace where owners who are thinking about selling and buyers who are tossing around ideas can come together. Inman News ran a full article on Keyzio a couple of weeks ago.

Zillow has long had a "Make Me Move" feature, where homeowners who don't want to sell would consider doing so at a set price. Keyzio takes this idea and runs with it. How? Buyers can choose a neighborhood they want, select a house they like, and let the owners know that when the time comes to sell, they're interested in buying. Owners may also place their homes on the platform, even if they're not ready to sell.

In other words, the platform lets home buyers and home sellers to contact one another. Buyers can search homes that aren't actually listed for sale just yet, and sellers can gauge interest in their home's marketability without engaging a real estate broker. True, people have always been able to contact whomever they want. I once owned a home in a popular neighborhood where homes seldom came up for sale and would receive postcards from lay people expressing interest. I also received cards (and phone calls) from brokers who claimed to have a client wanting to buy my house. It never turned out to be true.

But Keyzio institutionalizes this kind of interest and keeps the parties at arm's length. I pretty much lost the postcards and when I thought about them, I assumed the sender had lost interest anyway. Keyzio keeps interest alive.

What's kind of interesting is that the Keyzio founders, just as with Suitey and others, found motivation in their personal experience with home buying and selling. The traditional way of doing business--namely, contacting a broker for access to the gateway into homes for sale--just didn't work for them.

Real estate agents may not prospect for clients on the site. That said, Keyzio says it is working on ways to include brokers, especially at the point of transaction where broker services can be so valuable.

What does this all mean? The Captain believes it's just more evidence of a sea change in the way homes are bought and sold and in how brokers are compensated, all brought on by the preferences of the Millennial generation. The business needs to be consumer-centric, not brokerage- or broker-centric. And brokers need to think small by concentrating on neighborhood specialization, advanced education and transactional skill expertise.